Correlation Between Everest Metals and BTC Health

Can any of the company-specific risk be diversified away by investing in both Everest Metals and BTC Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Everest Metals and BTC Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Everest Metals and BTC Health Limited, you can compare the effects of market volatilities on Everest Metals and BTC Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Everest Metals with a short position of BTC Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everest Metals and BTC Health.

Diversification Opportunities for Everest Metals and BTC Health

-0.24

Correlation Coefficient

Everest Metals  BTC Health

Very good diversification

The 3 months correlation between Everest and BTC is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Everest Metals and BTC Health Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTC Health Limited and Everest Metals is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Everest Metals are associated (or correlated) with BTC Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTC Health Limited has no effect on the direction of Everest Metals i.e., Everest Metals and BTC Health go up and down completely randomly.

Pair Corralation between Everest Metals and BTC Health

Assuming the 90 days trading horizon Everest Metals is expected to generate 0.73 times more return on investment than BTC Health. However, Everest Metals is 1.37 times less risky than BTC Health. It trades about 0.12 of its potential returns per unit of risk. BTC Health Limited is currently generating about 0.0 per unit of risk. If you would invest  13.00  in Everest Metals on December 21, 2024 and sell it today you would earn a total of  4.00  from holding Everest Metals or generate 30.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Everest Metals  vs.  BTC Health Limited

Everest Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Everest Metals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Everest Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

BTC Health Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days BTC Health Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, BTC Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Everest Metals and BTC Health

The main advantage of trading using opposite Everest Metals and BTC Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everest Metals position performs unexpectedly, BTC Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BTC Health will offset losses from the drop in BTC Health's long position.

The idea behind Everest Metals and BTC Health Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.